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Montenegro Airlines posts hefty losses

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Montenegro Airlines plans for “smart” winter in a bid to cut costs

Montenegro Airlines has recorded a net loss of 6.5 million euros during the first half of the year but says it has taken measures to improve its fiscal performance and reduce its debts. Its net loss for the whole of last year amounted to 9.5 million euros, making it the least profitable national carrier in the former Yugoslavia. The airline’s debt currently stands at 74 million euros, which is down from the 82 million the current management inherited from its predecessors in mid-2013, CEO Daliborka Pejović says. She notes that there is no fear of bankruptcy. The airline has settled its debt to Pristina Airport, to which it suspend flights in 2011 due to unpaid handling and landing fees. Furthermore, the carrier has made an arrangement with its owner, the Montenegrin government, to reprogram its debt to the operator of the country’s two international airports - Podgorica and Tivat - amounting to 6.4 million euros. The debt repayments will start on March 1, 2017 and will be made in instalments over 108 months. Last year it was found that Montenegro Airlines had falsified financial reports and recorded smaller losses for several years leading up to the summer of 2013. Ms Pejović says some sixteen million euros in losses were covered up by the previous management.

Montenegro Airlines’ CEO explains that the company has come up with two measures to “fight the fires” - leasing out its aircraft during the slower winter months and reprogramming its loans for which the government has provided bank guarantees. “It is in our interest to put the aircraft we have to better use during the winter season, when we can lease them at a good price on some other markets”, Ms Pejović says. The carrier currently has six jets in service. “These measures are already in their final stage of implementation and will need the approval of the government and some good business practice”, the CEO notes. She adds that the number of employees has been reduced from 454 to 398 since July 2013 and announced that a further 23 workers will be sacked at the end of the summer season.

Previously, the airline planned to launch flights to Zagreb this winter and was considering introducing services to Skopje as well. However, in light of its financial situation, these are now questionable. Furthermore, the airline’s strategic partnership with Etihad Airways, announced back in February by Ms Pejović for this summer, is looking increasingly unlikely. Montenegro Airlines has seen an upsurge in passenger numbers during the first seven months of the year, with a strong start to August as well. During the January - July period, the Montenegrin carrier welcomed 320.000 passengers on board its aircraft, an increase of 4% compared to 2014.

So is bigger than Lebanon's yet we all know Croatia is totally unimportant country compared to the later one. GDP means not much about actual importance and level of development of a country. You should rather take the GDP to actual debt ration where Croatia would fare much less favourably not only to Serbia but to a wide array of underdeveloped countries.

Opportunity for BEG to check A332 operations at C gates, turnaround time etc. This will happen daily when Etihad starts sending A332 to BEG and JU starts using EY A332 wet lease to JFK. If that happens on a first day of S16 (27 March 2016), we will have exactly 224 days until then. Let the countdown begin!

Turnaround time seems to have been good enough, just under one hour, took off on-time. Of course it'd be a different story when it's about 300 pax but this was successful handling and first time they actually didn't send the A330 to B-stands. Will be great to see pics of it attached to it.

OT: Flew from SPU to BEG last Friday with OU. My girl flew same route but with JU. Both planes +90%. Full of ex-yu people...JU should consider SPU in winter 2-3pw and take some pax ZAG...Also, flew BEG-CDG this morning, excellent service, A320 almost full...

possible wet lease 2 e190/5 to asl during winter. besides moderate downsizing operations during winter season asl desperately need new machines. if they retire all 4 b733 + 3 atr 72-200 and with unknown future of the minimum 2 of their 8 a319 it is obvious we will see new planes in asl very soon.

Fun photo, EY holding for departure while QR heavy is almost above RWY 12 piano keys. Rush hour lineup at BEG with EY, SU and JU. Dozen more planes in a queue and it will be like JFK on busy afternoon!

What YM needs is just a single but efficient prop machine, a 70 seater would do the job - to be used year round. They underserve the region and should offer double daily flights to other ex yu capitals on selected working days as to attract business travel customers for higher yields - all just with a single efficient prop, e.g. like this:1+4) TGDZAGTGD 6:10-7:15 7:50-8:55 TGDSKPTGD 9:30-10:10 10:45-11:25 and TGDZAGTGD 16:10-17:15 17:50-18:55 TGDSKPTGD 19:30-20:10 20:45-21:252+5) TGDLJUTGD 6:00-7:15 7:50-9:05 TGDPRNTGD 9:40-10:15 10:50-11:25 and TGDLJUTGD 16:00-17:15 17:50-19:05 TGDPRNTGD 19:40-20:15 20:50-21:256) TGDZAGTGD 6:10-7:15 7:50-8:55 TGDSKPTGD 9:30-10:10 10:45-11:257) TGDLJUTGD 16:00-17:15 17:50-19:05 TGDPRNTGD 19:40-20:15 20:50-21:25In between on Saturday late morning till Sunday afternoon, on Wednesdays and even in early afternoons on 1,2,4,5 days they can use that bird to replace some flights to FCO, BEG, VIE operated by the 110-seaters or even add frequencies on those short haul routes. According to the LFs a 70-seater would mostly be sufficient to accommodate all pax. Additionally, an ATR72-6 or Q8-400NG are much more efficient than their F100 and E190/95 and do not need more than 5-10mins extra per flight leg. One must fear flying half empty 110-seaters for 9 out of 12 months a year will make them become bankrupt at some point.

I agree, regional turboprop is needed. But I doubt they can could get away with a single one. They need two at least.

I have been saying this as well for ASL. They have to upgrade their regional fleet in order to maintain their competitiveness. Fleet of new ATR72-600 or Q400s to replace all of current ATRs. Q400 would work quite well on medium routes that could replace Airbus without too much of a time penalty. On the short hops (TIV, TGD, SPU, DBV, SKP) drive it in low speed cruise at FL250 and you are a winner! Of course, we can argue that ATR would be slightly cheaper to run on those routes, but ATR could not replace Airbus on longer flight (WAW, MUC, ATH, MXP) when the loads are thin.

Montenegro Airlines should have set TIVBNX charter flights in July and August since BH Airlines got bankruptcy. Last year, there averagely were more than 40 PAX per flight. This year it would have increased to at least 60 per flight if YM had flown on that route.

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